Murphy USA Inc. operates a chain of retail stations offering motor fuel products and convenience merchandise. The company was founded in 2013 and is based in El Dorado, Arkansas.
MUSA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for MUSA, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Murphy USA Inc ranked in the 54th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 33.67% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for MUSA, they are:
Interest coverage, a measure of earnings relative to interest payments, is 10.52; that's higher than 79.98% of US stocks in the Consumer Cyclical sector that have positive free cash flow.
Murphy USA Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than just 15.77% of tickers in our DCF set.
MUSA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than just 15.77% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as MUSA, try GFASY, SCI, SQBG, HMTV, and IP.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Canadian convenience store operator Alimentation Couche-Tard Inc, Japanese peer Seven & i Holdings Co and private equity firm TDR Capital are preparing to submit rival bids this week for Marathon Petroleum Corp's gas station network Speedway, according to people familiar with the matter. It is Marathon's second attempt this year to divest Speedway after negotiations with Seven & i, parent of the 7-Eleven convenience store chain, over a $20 billion-plus deal collapsed in March as the novel coronavirus spread in the United States. Speedway could now fetch between $15 billion and $17 billion, amid lower road traffic during the pandemic, the sources said.